Dec E-mini S&Ps (ESZ17 +0.11%) this morning are up +0.03% and European stocks are up +0.12% as strength in energy stocks lifts the overall market. Energy stocks caught a bid after Jan WTI crude oil (CLF18 +1.72%) rallied +1.69% to a new 2-1/3 year high when the API reported late Tuesday afternoon that U.S. crude supplies last week fell -6.36 million bbl. European stocks also found support on upbeat comments from ECB Executive Board member Coeure said "the economic environment is improving, price pressures are building up and we've become less reliant on our monthly net asset purchases." Asian stocks settled higher: Japan +0.48%, Hong Kong +0.62%, China +0.59%, Taiwan +0.40%, Australia +0.38%, Singapore +0.19%, South Korea +0.59%, India +0.25%. China's Shanghai Stock Index posted a 1-week high as Asian markets moved higher on carry-over support from the rally in the S&P 500 on Monday to a new record high.

The dollar index (DXY00-0.09%) is down -0.14% after Fed Chair Yellen signaled the pace of Fed tightening will be slow and gradual when she said, "removing policy accommodation too quickly risks leaving inflation below our target". EUR/USD (^EURUSD) is up +0.09%. USD/JPY (^USDJPY) is down -0.32%.

ECB Executive Board member Coeure said "the economic environment is improving, price pressures are building up and we've become less reliant on our monthly net asset purchases." He said he expects "interest rate guidance to gain importance over time, up to a point where" it would be possible to delink it from the end of net asset purchases.

Fed Chair Yellen said, "removing policy accommodation too quickly risks leaving inflation below our target" and there had been "some hint" that expectations for future price increases may be drifting down. "On the other hand, removing policy accommodation too slowly also has risks and the labor market could tighten very quickly."

Deere & Co (DE +1.69%) is up over 3% in pre-market trading after it reported Q4 EPS of $1.57, higher than consensus of $1.47.

Cracker Barrel Old Country Store (CBRL-4.08%) was downgraded to 'Neutral' from 'Buy' at Longbow Reasearch.

Salesforce.com (CRM +1.33%) lost 1% in after-hours trading after it said it sees Q4 adjusted EPS of 32 cents to 33 cents, below consensus of 34 cents.

Exelixis (EXEL +1.56%) gained almost 2% in after-hours trading after it said it will submit a supplemental New Drug Application to the U.S. Food & Drug Administration in Q1 of next year for its Cabozantinib in the treatment of hepatocellular carcinoma.

Halozyme (HALO +2.67%) was downgraded to 'Equal-Weight' from 'Overweight' at Barclays.

Terreno Realty (TRNO +2.00%) was upgraded to 'Buy' from 'Neutral' at National Securities with a target price of $45.

Axalta Coating Systems Ltd (AXTA +0.98%) rose almost 3% in after-hours trading after Reuters reported the company received an all-cash offer from Nippon Paint today.

Guess? Inc (GES +0.96%) tumbled 10% in after-hours trading after it reported Q3 net revenue of $554.1 million, weaker than consensus of $569.8 million, and then said it sees full-year adjusted EPS of 56 cents-63 cents, the mid-point below consensus of 60 cents.

TiVo (TIVO +0.86%) rallied over 10% in after-hours trading after the U.S. International Trade Commission said Comcast's set-top boxes infringe on two TiVo patents and issued an import ban on the X1 television set-up boxes used by Comcast.

Hewlett Packard Enterprise (HPE +0.21%) fell 5% in after-hours trading after it reported Q4 net revenue of $7.66 billion, below consensus of $7.77 billion, and said it sees Q1 adjusted EPS of 20 cents to 24 cents, weaker than consensus of 27 cents. Also, CEO Meg Whitman will step down on Feb 1 and be replaced by President Antonio Neri.

DryShips (DRYS +5.30%) dropped over 8% in after-hours trading after it reported that its Q3 net loss attributable to common stockholders widened to -$15.2 million from a year-ago loss of -$5.8 million.

MARKET COMMENTS

Dec S&P 500 E-mini stock futures (ESZ17 +0.11%) this morning are up +0.75 points (+0.03%). Tuesday's closes: S&P 500 +0.65%, Dow Jones +0.69%, Nasdaq +1.11%. The S&P 500 on Tuesday rallied to a new record high and closed higher on optimism about the U.S. economic outlook that prompted Goldman Sachs to raise its 2018 target for the S&P 500 to 2,850 from 2,500, citing an expansion in profits and valuations. There was strength in homebuilding stocks after U.S. Oct existing home sales rose +2.0% to 5.48 million, stronger than expectations of +0.2% to 5.40 million. There was also strength in energy stocks after crude oil prices rose by +0.73% to a 1-week high.

Dec 10-year T-note prices (ZNZ17-0.04%) this morning are down -1.5 ticks. Tuesday's closes: TYZ7 unch, FVZ7 -2.75. Dec 10-year T-notes on Tuesday closed unchanged. T-note prices were boosted by positive carry-over from a rally in German bunds to a 1-1/2 week high and by the slide in the 10-year T-note breakeven inflation rate to a 2-week low. T-notes were undercut by the +2.0% increase in U.S. Oct existing home sales, stronger than expectations of +0.2%, and by the rally in the S&P 500 to a new record high, which curbed the safe-haven demand for T-notes.

The dollar index (DXY00-0.09%) this morning is down -0.136 (-0.14%). EUR/USD (^EURUSD) is up +0.0010 (+0.09%) and USD/JPY (^USDJPY) is down -0.36 (-0.32%). Tuesday's closes: Dollar Index -0.128 (-0.14%), EUR/USD +0.0005 (+0.04%), USD/JPY -0.17 (-0.15%). The dollar index on Tuesday closed lower on the decline in the 10-year T-note yield, which reduces the dollar's interest rate differentials, and on reduced inflation expectations that is dovish for Fed policy after the 10-year T-note breakeven inflation rate fell to a 2-week low.

Jan crude oil (CLF18 +1.72%) this morning is up +96 cents (+1.69%) at a new 2-1/3 year high and Jan gasoline (RBF18 +0.21%) is +0.0032 (+0.18%). Tuesday's closes: Jan WTI crude +0.41 (+0.73%), Jan gasoline +0.0271 (+1.56%). Jan crude oil and gasoline on Tuesday closed higher with Jan crude at a 1-week high. Crude oil prices were boosted by a weaker dollar, the rally in the S&P 500 to a new record high, by by expectations for Wednesday's EIA crude inventories to fall -2.2 million bbl.

About the author

Barchart U.S. Morning Call is written by the experienced members of the Commodity Research Bureau and the Barchart Research Team. Commodity Research Bureau (CRB) has been providing research to the financial and commodity community since 1934. If you have any questions for our analysts, please contact us at support@crbtrader.com.

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